I read it as he was watching a market free fall and was looking to capitalize on it. He had no way of knowing if the sell order was fraudulent. It could have been someone trying to drastically crash the value of BTC, but still a legitimate owner.
Buying them through MtGox wasn't the same as buying bitcoins out of the back of some guy's car.
What about people who had standing buy orders? They could never had known about the market free-fall and conditions surrounding their eventually accepted orders.
Exactly. If I see the price of Apple drop precipitously, I might think that somebody is manipulating the market, but I'd be a fool not to buy it at $5/share.
Also, what if it wasn't an attack? What if someone with a lot of bitcoins was running a malconfigured script? We've seen flash crashes in the real world caused by automated trading; why would btc be any different?
Or, what if it wasn't an attack, and someone was really trying to sell his bitcoins, either because he needed the money/thought that was a rational thing to do, or because he wanted to drop the market price for whatever reason.
I think that the OP considered the above possibilities and acted rationally. However, he also considered the possibilitiy of this being an attack/theft/hack and acted NOT like a dick.
Yeah, I think initially there was that. But after he bought he began to suspect there was fraudulent activity. And he still transferred the money out. The problem was not the buying, it is suggesting the MtGox is responsible for providing him with a free lunch now.
> wasn't the same . . .
No, but there was a commonality in that foul play was suspected. The point of the car analogy is not the appropriateness of the forum, because MtGox is unquestionably an appropriate forum. It's about how much evidence you have to suggest that something is amiss.
So if I get word that Anonymous is planning on doing another blitz trying to create a rumour that Steve Jobs has died, would I be wrong to short Apple? It doesn't matter whether the forces moving the market are legitimate or not; you can't be faulted for playing it. What you're advocating might be moral, but it's not in keeping with the principles of a free market.
According to the misappropriation theory of inside trading, it seems you would be doing something illegal. Or perhaps you could be convicted of acting as an accessory to securities fraud. Whether it's moral or in keeping with the spirit of capitalism I guess depends on your interpretation of those two things. Personally I don't think capitalism has a finders-keepers rule when participants buy stolen goods, but you may read it differently.
FYI, the information I'm basing this on comes from a similar case in the Wikipedia article:
"""
In 1997 the U.S. Supreme Court adopted the misappropriation theory of insider trading in United States v. O'Hagan, 521 U.S. 642, 655 (1997). O'Hagan was a partner in a law firm representing Grand Metropolitan, while it was considering a tender offer for Pillsbury Co. O'Hagan used this inside information by buying call options on Pillsbury stock, resulting in profits of over $4 million. O'Hagan claimed that neither he nor his firm owed a fiduciary duty to Pillsbury, so that he did not commit fraud by purchasing Pillsbury options.[16]
The Court rejected O'Hagan's arguments and upheld his conviction.
The "misappropriation theory" holds that a person commits fraud "in connection with" a securities transaction, and thereby violates 10(b) and Rule 10b-5, when he misappropriates confidential information for securities trading purposes, in breach of a duty owed to the source of the information. Under this theory, a fiduciary's undisclosed, self-serving use of a principal's information to purchase or sell securities, in breach of a duty of loyalty and confidentiality, defrauds the principal of the exclusive use of the information. In lieu of premising liability on a fiduciary relationship between company insider and purchaser or seller of the company's stock, the misappropriation theory premises liability on a fiduciary-turned-trader's deception of those who entrusted him with access to confidential information.
"""
Of course, IANAL and I could be wrong, but it sounds like the same sort of thing. Information is created about a company by a third party, and someone else uses that information to make trades.
Then again, these two situations are also not analogous, because this guy's trades on MtGox were based on public information (namely that the value of bitcoins was falling precipitously). So he might not have done anything technically illegal, were this a real exchange. However, his trades would probably have been rolled back in a real exchange (assuming the trades were enough to move the market like this), so that still supports my overall perspective that he should not expect to get away with the money.
There's no inside information, it was all public. That case doesn't apply unless he knew something that only Mt Gox "employees" should know.
And I've never seen him say he should keep the money (he said they didn't even ask him the money back), he just disagrees with the decision of rolling back by force, which affects the whole Bitcoin market, not just himself.
Buying them through MtGox wasn't the same as buying bitcoins out of the back of some guy's car.
What about people who had standing buy orders? They could never had known about the market free-fall and conditions surrounding their eventually accepted orders.